The Illinois Supreme Court overturned the state’s 2013 pension reform law, ruling it unconstitutional.
The state—which has a US$100 billion-plus unfunded pension liability in its pension plan—wanted to cut back cost-of-living increases, give workers the option of freezing their DB plan and moving into a DC plan, and raise the retirement age for workers 45 and younger.
The court says the law violates the pension protection clause in the 1970 Illinois Constitution. “Crisis is not an excuse to abandon the rule of law,” says the court’s ruling. “It is a summons to defend it.”
Read: Illinois lawmakers approve pension reform
Labour groups are pleased with the ruling.
“We are thankful that the Supreme Court has unanimously upheld the will of the people, overturned this unfair and unconstitutional law, and protected the hard-earned life savings of teachers, police, fire fighters, nurses, caregivers and other public service workers and retirees,” says Illinois AFL-CIO president Michael T. Carrigan on behalf of the We Are One Illinois coalition of unions.
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